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Simon Company's year-end balance sheets follow.

At December 31 Current Year 1 Year Ago 2 Years Ago
Assets
Cash $ 31,108 $ 37,475 $ 37,116
Accounts receivable, net 94,759 62,984 52,038
Merchandise inventory 112,202 86,661 53,785
Prepaid expenses 10,120 9,837 4,252
Plant assets, net 289,819 266,843 239,309
Total assets $ 538,008 $ 463,800 $ 386,500
Liabilities and Equity
Accounts payable $ 136,643 $ 78,382 $ 49,487
Long-term notes payable 102,157 103,474 86,271
Common stock, $10 par value 162,500 163,500 162,500
Retained earnings 136,708 118,444 88,242
Total liabilities and equity $ 538,008 $ 463,800 $ 386,500
For both the current year and one year ago, compute the following ratios:

The company’s income statements for the current year and one year ago follow. Assume that all sales are on credit:

For Year Ended December 31 Current Year 1 Year Ago
Sales $ 699,410 $ 551,922
Cost of goods sold $ 426,640 $ 358,749
Other operating expenses 216,817 139,636
Interest expense 11,890 12,694
Income tax expense 9,092 8,279
Total costs and expenses 664,439 519,358
Net income $ 34,971 $ 32,564
Earnings per share $ 2.15 $ 2.00
(1-a) Compute days' sales uncollected.

(1-b) Determine if days' sales uncollected improved or worsened in the current year.

(2-a) Compute accounts receivable turnover.

(2-b) Determine if accounts receivable turnover ratio improved or worsened in the current year.

(3-a) Compute inventory turnover.

(3-b) Determine if inventory turnover ratio improved or worsened in the current year.

(4-a) Compute days' sales in inventory.

(4-b) For each ratio, determine if days' sales in inventory improved or worsened in the current year.



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